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n ongoing explosion in entrepreneurial activity has been taking place on college campuses, especially related to tech startups. The recent study How Technology-Based Start-Ups Support U.S. Economic Growth (J. John Wu and Robert D. Atkinson, Information Technology & Innovation Foundation, 2017) calculates that the number of technology-based startups in the United States grew 47 percent in the last decade, and that these new firms have been making an outsized contribution to economic growth.

Angel investors are an early step in a tech venture’s path to success. For the last 10 years as members of the Hyde Park Angels, we have been investing in commercializing tech startups founded by university students. Our investments focus on companies that distinguish themselves in both their innovation and entrepreneurship. Here are the three factors we look for in making an investment and how the Ed Kaplan Family Institute for Innovation and Tech Entrepreneurship—by specifically equipping Illinois Tech students with teachable skills in entrepreneurship and innovation—will be preparing students to chart a successful course for their futures:

A Transformational Idea that Reinvents and Disrupts—and Doesn’t Simply Improve

Opportunities abound to establish tech startups that do no more than create a work-around to a problem by offering a faster, better, or cheaper approach.

The most successful tech startups are disruptors based on revolutionary ideas that are obsolescing and not simply evolutionary and/or incremental. They offer new solutions, not just work-arounds.

The Kaplan Institute was specifically formed to create an environment for students to develop new solutions that promise radical change as part of their Illinois Tech experience. Our students will develop the essential skills, obtain the critical feedback, and engage in real-world projects that will enable them to achieve consequential business and social breakthroughs. In this way, our graduates can achieve impressive outcomes at a much faster pace and be more effective employees and contributors immediately upon graduation.

A Convincing Team

An authentically passionate team, whose creativity, determination, and value exceeds that of the individual team members, is what separates the best startups from the rest of the pack. The team’s hard capabilities and soft capabilities, especially the intangible team-wide commitment to succeed, are critical to a startup’s success. This balance is core to our angel investment decisions.

In Illinois Tech’s Interprofessional Projects (IPRO) Program, now housed at the Kaplan Institute, diverse teams collaborate to solve challenging and important business and societal problems. The Kaplan Institute’s leadership programs provide practical hands-on experience in collaboration, setting direction, and resolving conflicts.

Startups That Have Already Learned from Their Mistakes

We look for business teams that have already benefited from a learn-by-doing-and-screwing-up approach. They know how to adapt to unexpected situations while staying on course. We seek teams that can adjust, pivot, and overcome the insurmountable. Hitting the wall, adapting, and persevering must be core competencies. Tech-enabled innovations depend most on the team’s ability to rapidly sense the unexpected, adapt, and prosper. We have seen this capability demonstrated in many startups, with products as diverse as a prenatal intubator, a virtual-reality surgical prep program, and a touchscreen optimized for all-weather conditions on gas pumps, to name just a few.

The Kaplan Institute’s experiential learning methodology is founded on an iterative try-learn-improve approach. This prepares graduates for a world where the written plan is only good until the unanticipated happens. Graduates will know how to adapt and adjust rapidly to ever-changing realities around them. This is great life preparation, no matter what path graduates take after Illinois Tech.